S&P raise not fair, nor scientific: Turkish PM

ANKARA - Hürriyet Daily News

Turkish Prime Minister Erdoğan adresses to his party group. DAILY NEWS photo, Selahattin SÖNMEZ

Turkish Prime Minister Recep Tayyip Erdoğan said Standard & Poor’s move to raise Turkey’s sovereign credit rating to BB-plus from BB was an important development, but not sufficient.

“This rating upgrade is neither fair nor scientific. We do not want an ideological approach,” he said during his address to the parliamentary group of his party.

Echoing his cabinet’s previous remarks, the prime minister also slammed the ratings agencies and said they want this insufficient rating upgrade “to be fixed.”

Ratings agency Standard & Poor’s raised Turkey to within a whisker of investment grade on March 27, citing a rebalancing economy and progress in a Kurdish peace process, but the move failed to impress the country’s rulers and business circles as all seemed to think that “Turkey deserves more.”

S&P has had a rocky relationship with Turkey, which reacted angrily last year to the ratings agency’s downward revision of its outlook to stable from positive. The agency converted its ratings on Turkey to “unsolicited” in January, meaning it is not paid by the country to provide cover but does so anyway.

After several disagreements with the ratings agencies, the government, feeling underestimated, directed the Banks Association of Turkey (TBB) to establish a local credit ratings agency.

Fitch upgraded Turkey to an investment grade of BBB in November, citing its moderate and declining levels of public debt. Fitch is the only ratings institution among the top three to have kept Turkey in the “investible” category.Turkish investors expected a possible upgrade by Moody’s but the agency has made it clear that Turkey’s ongoing vulnerabilities were holding the country back.

During his remarks the prime minister also praised the recently announced 2.2 percent of Turkish economic growth rate for 2012, saying even it’s below the expectations, it’s a success compared to other countries. Turkish economy grew 8.8 percent in 2011 and 9.2 percent in 2010.